Prepare Your Indoor Playground, Play Cafe Business, Or Family Entertainment Center For A Recession

In this article, we are covering a bit of a heavy topic, but I know it’s one that’s likely been on your mind and heart lately- so we’re going to dive right into it.

That’s right, today we are covering recession prep. But fear not because I actually feel very strongly that if you are reading this right now and if you are constantly seeking to learn and improve and invest in your success– whether it’s here with me or with another business or life mentor– you are already doing exactly what you need to do and I feel really good about your chances of emerging from this potential recession with a business that is even stronger and more successful than before. 

So even though this is a heavy topic, we are going to cover everything you can be doing RIGHT NOW to give yourself and your business the absolute best chance and, more importantly, the absolute best PLAN possible. 

So chin up, we’ve got this.

But first, here’s the good news- if you’ve already gotten your business through the pandemic which I know many of my listeners and members have- you have already weathered what was essentially a 100% economic recession. Because it’s likely that almost all aspects of your business, or at least the most significant ones, were prevented from operating or generating income at all back in 2020. So if you’re listening to this and you were one of those amazing businesses who got through the pandemic– I feel even more confident about your chances

But even if your business came to life post-pandemic I am going to lay out the exact steps you can take to prepare your business as best as possible for the looming recession. And even though I have a masters degree in economics, I did a lot of additional research for this episode. I listened to the experts, I read tons of articles, I watched tons of videos– and I am going to link my best and most helpful sources in the show notes of the podcast episode I did on this topic if you’d like to do some digging of your own.

And by the way– I am going to go over the highlights here in this article, because if I were to cover everything in as much detail as I’d like, this would end up being an ebook!

So what I decided to do instead to keep this article nice and succinct while still giving you the level of depth I think you’ll benefit most from, is I made you a free download to go along with this episode, and you can download it for free right here. 

I compiled all of my episodes that relate to the recession prep steps I will be going through in this episode and I made you a binge-able recession prep playlist.
And to make this task even easier to tackle. I grouped the episodes into categories. So you can truly work your way through one step at a time until you feel completely confident moving forward, even in the most uncertain of economic conditions.

Alright let's get into it. 

(And by the way, if you prefer listening to reading, all of this info is available in audio form at the top of this page or on my podcast here available on all podcast platforms).

As I mentioned, while it may be difficult to predict the exact impact a recession will have on your business, there are proactive steps you can take to weather the storm and come out stronger on the other side.

But here are some key tips for preparing your cafe business for an economic recession:

1) Clarify Your Ideal Indoor Playground Business Customer

Now is the perfect time to remember that you don’t need to serve or appeal to every single person in your area in order to be successful and make it through the recession. Because while some of your more casual customers may cut visits to your indoor playground out of their budget, there will still be plenty of customers who are a perfect fit for your services and will still be willing to pay full price for them throughout the recession.

And I’m not saying your ideal customer needs to always be the wealthiest families in your community. That’s actually not what I’m saying at all. But what I am saying is that you need to clearly identify, both in your mind and in the mind of your team members, exactly who you’re seeking to serve with each of your offers.

You should all have clearly defined wants, needs, interests, objections– ALL that for each of your ideal customer avatars. This will help in the sales closing process, especially as you may see a decreased volume of inquiry or booking calls.  

If you are getting less inquiries– you MUST increase your sales conversion or booking rate in order to maintain your revenue and income.  

Episode 139 of the Profitable Play Podcast is designed to help you clarify these attributes of your ideal customers and formulate your marketing and sales strategy around this knowledge and insight. 

2) Know Your Play Cafe Business Numbers

Speaking of not needing to serve every single customer or family in your area in order to be successful, this is also the perfect time to gain clarity around your numbers.

Now is the time to know exactly how many consumers you need to serve for each of your core business offerings each month, week, and day. 

A lot of people ask me how many customers they can expect to serve a day in their indoor playgrounds, particularly during open play. But I really prefer to reverse engineer this, and doing so will help you budget your payroll hours, set marketing goals, calculate your open play pass and package prices,  and know if you’re on track to generate a profit each month and pay yourself what you desire as an owner.

So let’s take open play for example. Now this is going to be a simplified version of what I teach inside Play Cafe Academy, but let’s say you need to make $20k per month in order to recoup your start-up costs, pay your staff, pay your bills, and PAY YOURSELF.

And let’s also say you’ve determined that 20% of your business’ revenue will come from open play, or maybe that’s what it’s been historically. That means you need to generate around $4,000 per month just in open play. And for simplicity's sake, let’s say this is JUST daily open play passes and packages of passes- we are excluding memberships here. 

Breaking that down, that means you need to generate around $1,000 per week from open play passes or around $41 per day assuming you are open for open play 24 days per month.

And you can repeat this process for all of your core offers like parties, retail, cafe sales, classes, etc.

I have found that breaking it down in this way really helps me set daily goals for my staff and get a really strong handle on whether we are on track to make all of our bills that month. Having short daily checkpoints helps you make adjustments and pivot quickly if something isn’t working or needs to be adjusted– instead of realizing at the end of the month that there just isn’t enough money to write those checks and having to go back and comb through where it went wrong.

Now this might be totally off-base for you– if you have a larger space with higher costs, you may need to make much more than $20k per month to remain profitable and pay yourself as an owner. BUT a common mistake that many indoor playgrounds make is they get that % wrong that they’ll rely on open play for. 

So that 20% number that I mentioned might be more like 80%-- meaning they are relying on open play traffic for 80%+ of their revenue, which can be really dangerous as we head into this economic downturn. Because in a recession, as I said, the first stream of revenue to suffer will be open play. Casual customers who haven’t adopted your business into their routine and aren’t super invested in your success will be able to easily eliminate visits to your space when cutting back.

So as you go through this process and also listen to the episodes in your recession prep playlist in the “Know Your Numbers” category– keep that in mind. 

Your first preparation step should be to do a FULL audit of all the numbers inside of your business– your prices, your daily weekly and monthly goals, your budgets, your compensation requirements– all of that 

And hire help if you need it- because by knowing your numbers you’ll be better equipped to make more data-driven decisions in some of the following categories like when we talk about cutting costs.

3) Cut Costs And Negotiate With Vendors Wherever Possible

Take a close look at your current operations and identify areas where you can cut costs without sacrificing quality. This could mean scaling back your menu offerings, finding more cost-effective suppliers, or cutting back on hours of operation if you have a clear pattern of when people are most likely to visit.

Whenever money got a bit tight or costs increased but we didn’t want to raise prices at our indoor playground, we would scale back our offering a bit. For example, if a party package previously included 2 sheet pizzas, we’d keep the price the same but scale it back to 1 and charge for adding additional food. 

Or, if a party package previously included favors, we might consider removing that as an included item and instead add it to our a-la-carte menu. We’d of course honor the packages as they were when people booked them, but scaling back the offer for future parties really helped us to continue serving clients while remaining profitable, without increasing prices to a point we knew people wouldn’t be able or willing to pay– especially during a recession. And this can always be temporary.

You can also consider offering a new package at a lower price point than you’ve offered in the past but with a completely bare-bones offer. For example, just a plain old space rental with no decor, food, or activities. Of course I’d still recommend having party assistants and offering some basic things like clean up– but you may want to consider introducing a new limited time package to meet your customers’ changing needs and budgets.

You may also want to consider doing some cost-benefit analysis about buying in bulk to save on per-unit costs, reducing the frequency of deliveries you get if there is a delivery fee, and perhaps keeping some more of your operations in-house to keep more of your profits.

For example, if until now you have hired balloon artists or party planners to help your clients bring their decor visions to life– this is the perfect time to invest in some education for yourself or your team members to begin offering more of these services in-house. There are of course tons of free tutorials on YouTube, but even investing in an expert or a course will likely pay for itself in just a few installs and then become a real, sustainable revenue stream for you.

Many of my members right now are purchasing character costumes to include as an optional add-on for their parties instead of using outside vendors.

We of course always want to collaborate with other local businesses– but there comes a time when we also need to ensure we are serving our own clients at the highest level possible. Not only will that increase our profits, but it will also be much more convenient for our clients to work with only one company or point of contact for all their party needs.

And this exercise is something that will continue to serve you long after the recession as well.

And one last thing before we move on– this may also be the perfect time to look into hiring remote employees or virtual assistant contractors. Not only will you get access to a larger and more diverse talent pool by hiring remotely, you can often save money in payroll costs by utilizing this strategy as well which I have several episodes about.

4) Streamline And Systematize Your Indoor Playground Business Operations

One of the best ways to reduce costs, especially when it comes to payroll and owner hours, is to streamline and systematize. And I have SO many episodes on this which again I have included on the recession prep playlist you can download for free in the show notes.

NOW is the time to create your standard operating procedures and identify any potential bottlenecks in your business systems that are either costing your team valuable time and energy OR costing you lost sales and customers.

So if you know your online booking system is super confusing and your customers always have issues booking and need to call or email for assistance frequently– now is the time to invest in a more efficient and high-converting system.

 If there are a few tasks in your business, like cleaning for example, that never get done correctly or that you KNOW your staff is cutting corners on– now is the time to document, step-by-step, in both written and in video form, exactly how it should be done.

Not only will this create a more cost-effective training system for new employees and therefore reduce your payroll costs, it will also help identify any of those potential bottlenecks and allow you the time to fix these systems as soon as possible, before the recession hits and you may need to reduce your staff hours.  

If your staff spends a ton of time on the phone fielding calls, now may be the time to invest in a call forwarding system like I talk about in episode 105 of the Profitable Play Podcast– this was one of the smartest investments I ever made in my business.

If your manager spends hours each week writing a staff schedule, you may want to look at some automation tools to help with that process. 

Maybe it’s the time to set up automated ordering so you don’t need to do it from scratch every single month or week.

And when it comes to marketing– I am going to be honest with you– you may need to do a lot MORE to maintain the same revenue.

For example, if you previously sent out 1 email a week to get 3 or 4 bookings, now you may need to send 2 or 3.

If you got by with 3 instagram or Facebook posts per week, you may now need 5. So the more systems you can create around this, the less painful this “doing more” will be if it comes to that. And as I mentioned in the last step, if you create marketing SOPs, this is something that can be easily delegated to a remote employee or VA.

If I could only choose ONE of these ten steps from this episode to focus on before the recession comes, it would be THIS step.

Because streamlining your operations won’t only help you cut costs now, it will pay off big time for months and years to come.

 And if you ever decide to expand or sell your indoor playground or play cafe business someday– you will need to go through this streamlining and systematizing process anyway– so why not tackle it RIGHT NOW?

5) Diversify Your Family Entertainment Center Revenue Streams

I mentioned this a  bit when I talked about keeping more of the services your current customers need in-house, but I felt like it was worth expanding on here.

I already mentioned adding balloons and characters to your add-on menu of services you can train your team to offer, but I really want you to think outside the box here. 

For example, during the pandemic, many of my members began offering things like balloon bouquet or art delivery or pick up. And it wasn’t just for kids' parties. Tal from Art Factory And Play Cafe in Virginia, for example, has a thriving balloon revenue stream where she has the opportunity to serve customers her in-house parties would not be able to. For example, she gets balloon orders for Easter and other holidays, graduations, retirements, adult birthdays, baby showers, and even weddings, corporate events, school functions, and business openings. 

I want you to really think critically when you go through my episodes on this and think of how you could use the resources and skills you may very likely already have– in this case maybe it’s an air compressor and some ballon skills– and ask yourself–

How else could I use these resources, skills, and tools to serve people in my community? Is there another segment of customers who could benefit from my services that I haven’t been able to serve yet?

Or maybe it’s coffee or cafe pick up or delivery. Or soft play rentals. Or party planning services. Or maybe its offering different types of events like baby showers and sprinkles instead of just kids parties. 

I guarantee you that there is some tool or skill or service you currently offer that has untapped potential for your businesses revenue. So spend some time figuring this out now– because it will be much easier to think with a clear and creative mind before you go into panic mode or into the mindset that you have bills you need to pay like– YESTERDAY. Trust me.

6) Focus On Recurring Revenue, Like Open Play Memberships 

This probably will come as no surprise to you if you listen to my podcast, but right now it’s more important than ever to focus on recurring revenue, specifically memberships.

Now is the time to craft your perfect membership offer and grow it to capacity which i talk all about in episode 169 of the Profitable Play Podcast.

Your members will begin to ingrain your business into their normal routine and will be much more likely to continue supporting you even if they need to cut back a bit.

The more you can form relationships with your members, deliver excellent service, and surprise and delight them whenever possible– the more they will feel like they are a true part of your business. 

And while you want to gain as many loyal members as possible and focus on retaining them prior to the recession, now might be a great time to repackage and refine your offer as I alluded to.

Just as you may need to scale back some of your party packages, your membership may need similar treatment.

For example, if you previously included events or classes in your memberships, you may want to repackage or even rebrand a bit and offer a “value” tier where customers can still get the benefit of unlimited open play without paying for things they may not use anyway. This will allow you to gain more members AND reserve more of your class and event seats for full-price playing customers.   

You can also replace including events with instead offering advanced or priority registration as I talked about in episode 171. It’s still going to be something valuable to your customers yet still allowing you to scale back your offer and maybe your price a bit.

7) Generate Quick Cash Reserves In Your Indoor Playground Business RIGHT NOW

Now is also the time to start generating some working capital and cash reserves, just in case you do see a greater-than-expected decline in traffic or bookings during the recession.

Because none of us truly can predict how bad the economy will dip or how adversely our customers or businesses will be affected.
On that recession prep playlist I included several different ways to generate significant income quickly so you can start building those reserves– both for your personal finances and your business.

One thing I do NOT want you to do is start stocking up on supplies with this extra revenue you generate. 

 If a recession does occur, prices for many of your vendors may drop by 30 to 50% and they will likely be much more keen to negotiate, especially if you’re going to place a large order. So in reality, $1 you generate and save NOW could actually be worth $2 in the future, taking this new purchasing power into account. So resist the urge to buy buy buy and hoard right now– focus on generating working capital and set it aside in a way that feels secure and comfortable to you.

8) Prepare To Adapt to Changing Customer Habits 

During a recession, customers may cut back on spending, so it's important to stay in tune with their needs and preferences. Consider offering value-oriented menu items or discounts to attract price-conscious customers.

While offering value-based party packages or memberships might be beneficial to sustain your revenue through a recession, I also want you to be very careful with this.

Through proper messaging I want you to ensure you are still attracting customers who VALUE and respect your space. Because if you discount too much, you will definitely attract some of the wrong types of customers and clients who will be more trouble than they’re worth. 

And again I am NOT saying you should only seek to attract wealthy families– that’s not it at all. But if you start attracting people JUST out for a discount and who don’t value what you provide, it won’t end up benefiting anybody. 

So what I’d recommend is starting small and carefully with this one.

Maybe offer those value-based tiers privately only when asked (this can be a great tool to empower your staff with to help them close more sales), or offer them first to your email list exclusively– people who have already raised their hand and said they’re interested in your business.

The point here is to just be prepared that people may be cutting back and changing how they spend their money– so pay attention and be ready to be agile and flexible when it’s mutually beneficial.

For example, maybe you notice people aren’t as interested in entertainment type events like character visits now that their budget has gotten tighter.

But maybe they’re still very willing to spend on educational type classes since they value them more.

Be sure to keep your finger on the pulse of what your customers are thinking and doing– whether that’s through surveys, engaging on social media, through focus groups or a closed Facebook group, or speaking to your regulars in person.

9) Increase Your Potential Customer Base By Becoming A More Inclusive Play Space 

If you’ve been reluctant up until now to really roll up your sleeves and work on becoming more inclusive in your space, now’s the time.

I have many episodes linked in your recession prep playlist about better accommodating different groups of customers such as autistic kids and adults as well as families facing food allergy challenges. 

And while, yes, we should always strive to be more inclusive from a humanitarian perspective, it also makes a big difference when it comes to your bottom line as well when you realize that 1 in 5 families deal with food allergies millions of people in the US alone are on the autism spectrum– and that’s not to mention the many other disabilities and special needs people all over the world are faced with.

So now is the time to educate both yourself and your team and make any policy or space changes necessary to increase the groups of customers you can effectively serve– because many of these families will pay a premium for spaces that take their specific needs into account- recession or no recession.

10) Differentiate Your Business

I was listening to a podcast with Alex Hormozi as part of my research for this episode, and he has been operating businesses much longer than I have– including through the 2008 recession and the pandemic.

And something he said really stuck with me.

He said that many business owners will assume that revenue across the board for businesses in an industry will decrease by– let’s say 30% for example.

But historically, that’s not quite true. While, yes, revenue might go down a bit for everyone, it’s actually more accurate to say that the BOTTOM 30% of businesses will go down by 100% (meaning they will fail and close)-- and their assets and market share will be redistributed amongst the top 70%.

So if you have 10 indoor playground or party options in your area, you don’t necessarily need to focus on being the BEST to survive– you just need to be in the top 7.

And by that I mean you need to be in the top 7 in terms of recurring revenue, reviews and positive word of mouth, in customer service, in quality, in terms of your actual play and party space and keeping it clean and maintained– all of that.

And one of the keys here isn’t to compete directly necessarily with the other play or party options in your area– it’s actually going to be differentiating your business from them. Make sure your website and your social media really highlights your unique offerings and strengths. Ensure you have plenty of high-quality professional photos showcasing your space and party offerings. 

Again if you KNOW you could be doing better in this area– NOW is the time to fix it– not when you see party bookings start to drop. It’s much more effective to get ahead of it so you aren’t losing out on any high-ticket bookings because your website isn’t up to par or professional or user friendly enough.

And again, I have a bunch of episodes in my recession prep playlist to help with this.

The key here is to stay optimistic, even in the face of economic uncertainty. While it can be easy to become discouraged during difficult economic times, it's important to maintain a positive outlook and focus on the future. Plan for future growth and opportunities, and don't be afraid to seek out help and advice from trusted advisors, mentors, and experts. And keep your team and customers in the loop as well. That’s one of the best parts about having a small local business- you’re not in it alone– I promise you.

By taking these proactive steps, you can increase the resilience of your play cafe business and position it for success, even in the face of an economic recession. Remember, being prepared and staying adaptable are key to navigating tough economic times.

So head to the show notes right now and download your recession prep playlist and get ahead of it– because again it’s much better to execute these strategies and stay creative and clear-headed if you go step-by-step and don’t wait until your back is against the wall and you’re seeing numbers dropping.

And if you need help executing any of these strategies we are talking all play cafes all the time in Play Maker Society, and we would love to welcome you into our community and help get you through these tough times– together.  

It’s more important than ever to have a support system and community behind you ready to jump in and help and offer advice– it’s something I would have killed for when I first launched my business and that’s the whole reason I created it. You can click here to learn more.

And don’t forget to download your Recession Prep Playlist below!